I am fortunate enough to have excess income after reaching the $18,500 IRS limit on my 401k as well as maxing out my HSA. I also have a healthy rainy day fund so I am looking for my next investment vehicle which seems to point towards a taxable account.

I have read that VTSMX is a pretty tax friendly fund do to low turnover so I opened up a new account at TD Ameritrade where I also have a Roth IRA and threw $15k in there to start with the plan to add about $1-2k a month moving forward. The problem seems to be that TDA is hitting me with a healthy trade fee because it’s a Vanguard fund. I read that in this case it’s better to go with the VTI ETF because it’s pretty much the same and doesn’t carry the mutual fund fee however unfortunately it is not a commission free ETF so I think I will get stuck paying a commission each month.

Is there a Comission free ETF at TDA that meets my needs or should I open a new account at vanguard if I want to use their fund? I know there is no free lunch, just looking for a cost effective lunch

Personally I’d not want to pay trade fees. Can trade VTI free at Vanguard or E*TRADE. Schwab has excellent ETFs as well that trade free at Schwab. Ditto Fidelity. Don’t know about TDA. There’s probably an equivalent you can get for free.

Personally I’d not want to pay trade fees. Can trade VTI free at Vanguard or E*TRADE. Schwab has excellent ETFs as well that trade free at Schwab. Ditto Fidelity. Don’t know about TDA. There’s probably an equivalent you can get for free.

I was funding the Roth previously but my income now makes me ineligible.

Personally I’d not want to pay trade fees. Can trade VTI free at Vanguard or E*TRADE. Schwab has excellent ETFs as well that trade free at Schwab. Ditto Fidelity. Don’t know about TDA. There’s probably an equivalent you can get for free.

I was funding the Roth previously but my income now makes me ineligible.

Welcome to the forum.

You might still be able to Fund a backdoor Roth. Look at the wiki.

Okay, I get it; I won't be political or controversial. The Earth is flat.

I wouldn't like paying trading fees. Your taxable account will grow and you'll likely at least one other fund. Monthly fees will add up. If you prefer using mutual funds and not ETFs, it would be cheaper to be at Vanguard. If ETFs are OK, I'd move to a broker that doesn't charge trading fees for Vanguard ETFs.

Personally I’d not want to pay trade fees. Can trade VTI free at Vanguard or E*TRADE. Schwab has excellent ETFs as well that trade free at Schwab. Ditto Fidelity. Don’t know about TDA. There’s probably an equivalent you can get for free.

I was funding the Roth previously but my income now makes me ineligible.

Welcome to the forum.

You might still be able to Fund a backdoor Roth. Look at the wiki.

Yup. Wiki has more info but as long as you have no tIRA pre-tax assets (401k rollover, etc) you can contribute the full Roth amount regardless of income.

Maybe time to switch to a lower cost provider or use TD’s broad market fund.

Will the back door Roth contributions apply to my $18500? If so I think that I might want to stick to my 401k at this point as I suspect my retirement income will be less than my current income (but can’t be sure of course).

If you want Vanguard mutual funds, you should buy them at Vanguard. Other brokerages will charge a transaction fee (commission) and you cannot get the lower cost Admiral share class at other places either.

It used to be possible to buy some Vanguard ETFs at TDA without a commission, but that has gone away. The commission for ETFs should be less than mutual funds, but I still don't suggest it.

I feel sure that TDA has some kind of Total Stock Index on their NTF list though. If you can't find one, call and ask them. Other funds should be just as good although they may be a little less tax-efficient because of Vanguard's unique mutual fund/ETF structure.

I tried to create a screener for only NTF funds and found FSTVX listed but when I look at the summary it doesn’t have the “NTF” icon that I expect to see. Can anyone suggest something at TD Ameritrade that meets my needs?

Will the back door Roth contributions apply to my $18500? If so I think that I might want to stick to my 401k at this point as I suspect my retirement income will be less than my current income (but can’t be sure of course).

No, you can do $18,500 to your 401(k) and $5,500 to an IRA each year. A backdoor Roth does not affect your 401(k) - you may be thinking about a mega-backdoor Roth where you convert after tax 401(k) contributions from your 401(k) to your Roth IRA. The pro-rata rule is what you need to worry about. I believe it only comes into play when you have a traditional IRA (including a former traditional 401(k) that you rolled over to a rollover IRA.). If your only accounts are your 401(k), taxable brokerage and a Roth IRA, you should be good to do a backdoor Roth IRA. Just make sure you file a Form 8606 with the IRS. I didn't originally know about that requirement.

If you are planning to buy only Vanguard funds you are probably better off opening an account there. However TD will allow you to set up an automatic investment plan to add funds to any position you already have and charge no commissions. You could, say, buy an additional $2k per month that way and pay no trading fees. To set this up and for any changes to the plan you may have to call them or submit a form.

The wiki has a section on tda that might be helpful (note that it recommends the above spdr etf)https://www.bogleheads.org/wiki/TD_Ameritrade
But I agree that if you want funds instead of etfs, open a vanguard account and transfer the tda money there.

The wiki has a section on tda that might be helpful (note that it recommends the above spdr etf)https://www.bogleheads.org/wiki/TD_Ameritrade
But I agree that if you want funds instead of etfs, open a vanguard account and transfer the tda money there.

If I plan to just have the one total market fund/etf, is there really and disadvantage of the spdr ETF vs the actual vanguard fund?

I am fortunate enough to have excess income after reaching the $18,500 IRS limit on my 401k as well as maxing out my HSA. I also have a healthy rainy day fund so I am looking for my next investment vehicle which seems to point towards a taxable account.

I have read that VTSMX is a pretty tax friendly fund do to low turnover so I opened up a new account at TD Ameritrade where I also have a Roth IRA and threw $15k in there to start with the plan to add about $1-2k a month moving forward. The problem seems to be that TDA is hitting me with a healthy trade fee because it’s a Vanguard fund. I read that in this case it’s better to go with the VTI ETF because it’s pretty much the same and doesn’t carry the mutual fund fee however unfortunately it is not a commission free ETF so I think I will get stuck paying a commission each month.

Is there a Comission free ETF at TDA that meets my needs or should I open a new account at vanguard if I want to use their fund? I know there is no free lunch, just looking for a cost effective lunch

You know the 18,500 is employee only, any employer match is in addition, right?

How old are you? Max contribution goes up the year you turn 50.

Does your employer allow post tax contributions? Do they allow in plan distributions of just the post tax portion? If so you may be eligible for a mega back door Roth. (Few employers have all conditions required to do this, but it is worth checking).

Others beat me to talking about the back door Roth. You make a non deductible IRA contribution, which is ok at any income. Then you convert this post tax contribution to a Roth. But you can not have any other IRAs or it effects the tax calculations. A 401k is not considered an IRA. So if you have any old IRAs, Rollover IRAs you can move them into your 401k so you are clear to do a back door Roth.

If your user name is your real name, contact a moderator to change it, you can flag your own post. As you post personal $$ info here, posts are searchable by anyone on the internet. Only members can post but anyone can read here.

You know the 18,500 is employee only, any employer match is in addition, right?

How old are you? Max contribution goes up the year you turn 50.

Does your employer allow post tax contributions? Do they allow in plan distributions of just the post tax portion? If so you may be eligible for a mega back door Roth. (Few employers have all conditions required to do this, but it is worth checking).

Others beat me to talking about the back door Roth. You make a non deductible IRA contribution, which is ok at any income. Then you convert this post tax contribution to a Roth. But you can not have any other IRAs or it effects the tax calculations. A 401k is not considered an IRA. So if you have any old IRAs, Rollover IRAs you can move them into your 401k so you are clear to do a back door Roth.

If your user name is your real name, contact a moderator to change it, you can flag your own post. As you post personal $$ info here, posts are searchable by anyone on the internet. Only members can post but anyone can read here.

Aware that my company match doesn’t count
I am 38
Company does allow after tax. What are in plan distributions?
No others IRA so will need to look at backdoor Roth
Will post the more detailed picture of my assets/options and change name as suggested

Some company plans allow after tax 401k contributions. And keep track of the amount and growth. And allow you to do an in plan distribution (allow you to move those specified funds from the plan while you are still "in plan" and employed). And that is a perfect set up for a mega back door Roth where you put post tax money into your 401k account, then move the pretax money and growth into a Roth and never pay tax on it again.

If there has been growth, you will pay income tax on that small growth number when you move it to a Roth.

Read about a mega back door Roth. Few companies have all of the pieces needed. You can do a back door Roth and a mega back door Roth the same year if the possibility is there. There are no IRS limits on Roth conversions per year. But you do pay income tax on the money. Which is not an issue for back door Roths since they are post tax anyway.